Scottish independence: Pension and welfare plans to be published

Welfare and pension plans for an independent Scotland are expected to be published by the Scottish government in the next few months.

Experts have been considering the "affordability of state pensions" in the event of a "Yes" vote in the 2014 referendum.

Opposition parties accused the government of planning to cut pensioner payments, a claim denied by ministers.

The plans emerged after a draft cabinet paper was leaked to the BBC.

Earlier, it emerged that the Fiscal Commission working group had been asked to look at the issue of state pensions.

Extracts from the leaked document

"Demographic pressures will increase the demand for existing public services, particularly but not exclusively in health. Spending on state pensions and public sector pensions is also driven by demographics and is set to rise."

"An important consequence of independence is that responsibility for benefits and welfare will be discharged in Scotland in response to Scottish conditions and priorities. When expenditure on welfare benefits is influenced by demand, especially recently when the Scottish economy was in recession, demographics is an important factor within this for Scotland giving the ageing profile of our population."

"I expect that the working group will consider the affordability of state pensions as its work on fiscal sustainability proceeds. Our fiscal rules will also need to take into account the issue of how Scotland funds counter-cyclical expenditure (with welfare, specifically payments to those who become unemployed, being probably the biggest component of this)."

The government said officials and experts would report to Deputy First Minister Nicola Sturgeon, who is in charge of developing the proposals.

Labour said the move would worry older people and the Conservatives said it suggested the SNP would cut pensions.

Scottish Labour's leader Johann Lamont said: "John Swinney [the Scottish finance secretary] is being warned of the economic damage leaving the UK would do to Scotland by his own officials and yet denies the truth.

"They are telling him of an even deeper public spending crisis coming after the referendum. They are telling him of the problem of an ageing population."

She added: "For pensioners these papers are particularly worrying. The advice given to Mr Swinney questions whether a separate Scotland could afford the state pension."

Scottish Tory leader Ruth Davidson said the difference between what the SNP say in public and what they know in private "is astonishing".

She added: "It is yet another example of the SNP trying to con the people of Scotland by promising them the earth but knowing they do not have the money to deliver.

"This secret document shows that under separation, Alex Salmond is preparing to cut the state pension for old people and unemployment benefit for those out of work."

Liberal Democrats believed Mr Swinney's sums "did not add up".

Mr Rennie told BBC Radio Scotland's Good Morning Scotland programme: "We want to know the detail because people want to know the details before they go to the polls in the referendum."

The Scottish government said its fiscal commission working group reported last month that demographic changes in Scotland were projected to be similar to those in the UK as a whole.

The issue of the discussion paper dominated proceedings at first minister's questions in Holyrood.

A government spokesman, said: "Detailed analysis shows that state pensions in an independent Scotland will be more affordable than they are in the UK.

All the parties brought their own versions of the leaked document to question time

"The official figures on spending for the last year show that only 38% of Scottish tax revenues were spent on social protection, which includes the state pension, compared with 42% for the UK as a whole."

The spokesman also said work on pensions had "moved on" since the leaked discussion paper was considered by the cabinet, adding: "The deputy first minister (Nicola Sturgeon) has since taken responsibility for the constitution and, as such, Scottish government officials and experts will report to her on work they are doing covering welfare and pensions in an independent Scotland.

"We look forward to publishing proposals on these subjects in due course."